The Savings Strategy (10-20-70)

Having a smart strategy is not only for the stock market but is also for personal finance. Without a sound strategy an increase in salary could be consumed quickly in one trip to the mall or be swiped off by purchasing items via instalment! In every money decision that we make we need to employ a sound strategy that would help us know where our money is going. For this article, Qatar based-Associate Financial Planner’s (AFP) very own Therese Domingo, will kick off her first of many columns for marvingermo.com, as she shares her “Savings Strategy.” I personally like the 10% portion of her strategy, which for me I give it to my local church as away of returning a portion of what God has blessed me with. It’s always to exciting to have a strategy attached to your finances!

The heart of why I do this seminars is I want to build a generation of Filipinos with the right foundation in stock investing. I want to bring smart investing to every Filipino around the world! If you would like to know more on how you could time the market checkout the trainings below.

It’s the start of the month again. For us regular employees, salary has come in again. My smartphone receives a message from the bank, which says, “ Dear customer, your current account no. XYZ123 has been credited with your full salary. (Do NOT even think of going to shopping malls and buy some stuff you don’t even need.)” My brain inserted that last line. It was flashing Ramadan sale pictures in my mind. This time, I want to be the boss of my financial life, not just this month, but to prepare me for the years ahead: marriage, kids, my own business, retirement, and recreation.

A research study sponsored by Sun Life Financial-Philippines namely, SOLAR or the Sun Life’s Study of Lifestyle, Attitudes and Relationships highlighted that out of 100 retirees, only 2 are financially independent. This is the battle cry of every Financial Advocates/Advisers/RFPs: To increase the number of Filipinos to be Financially Independent. Join me in my journey to take charge of my finances. If you’re on the same page, then let’s do this together. The Big Goal is to Follow the Prosperity Formula, setting aside of 10% of your income to charity, 20% to your savings/investments, 70% to your daily needs for the whole month (10-20-70). The 10% for charity is not fixed, as long as you know that you are giving it out of the goodness of your heart. This is why it is called the Prosperity Formula. For some, they follow the 30-70 rule: 30% savings/investments, 70% operational expenses. For me, I want to practice the 10-20-70 formula. Here are three tips to keep me focus on my goal :

“Amat Victoria Curam.”

Sounds familiar? This is the latin version of “Victory loves preparation” which was seen in the movie, “The Mechanic” starring Jason Statham. This statement can be applied in different areas of life. The same saying goes in planning your finances. You want to live within your budget? Then prepare your own personal financial statement for the month. This is what I do, to help me remind myself and it keeps me on track. It’s not at all hard as the formula already has a format to follow: 10-20-70.

“Be in the driver-seat of your (financial) life.”

I just attended a prayer meeting and this one struck me the most. Of course the preacher was talking about taking charge in all the areas of your life, and he mentioned that this is also true in setting your financial goals and achieving them. When you are in the driver-seat, you are the one taking control where you want to go, which route to take, how you will go to your desired destination. If you want to take control of your finances, starting this month, the key is to sort the items where your money is going, and prioritize the budget that should be seen in your personal financial projections consistently. So go ahead and identify the needs from wants, those items that need urgent attention (e.g. credit card debts), and check if there are some activities that trigger you to splurge. Once you have done this, you will have a clearer path in reaching that goal! You will feel more confident too.

“It’s always about saving little by little and making small things grow into big things.”

Starting something is really difficult, especially with your finances as the harvest comes in the latter years, so if you find yourself slacking, or getting out of track, remind yourself with this inspiring statement by Master Marvin Germo in his first book, “Stocksmarts.” Yes, you just started but doing it slowly but surely will make you religiously practice the essentials, and the next thing you know, you have crossed-out some debts, you would want to know more about other investment vehicles, you are sharing your money story to your relatives, and friends, and more importantly, you are on your way to Financial Independence.

I hope this helps you to jumpstart in handling your finances as it has refreshed my financial goals as well. If there is a yo-yo dieting in this aspect, it is losing sight of your financial goals and slacking in your financial discipline. I am sharing this article as I am addressing my own roadblock. Next week let me share to you some tips to keep you going and achieve that One Big Goal! Remember, what you choose today, will determine where you will be tomorrow.

I’m excited to share my 5th book overall and the 4th book in the Stock Smarts series, Stock Smarts: Breaking the Resistance – How to time your traders perfectly. The heart of this book is to teach you strategic ways on how to come in and buy and sell stocks in a way where you come as the market is headed up and come out as the market is headed down. The book is now out and exclusive via Marvin Germo Book Orders.